An estimated 5,000 mental health and addiction workers will now be included within the Care and Support Workers (Pay Equity) Settlement Act, after the Public Service Association and E tū union pushed the Government.

Health Minister Dr David Clark said: "This is money that they deserve and it is putting right a wrong. These are people who are amongst the lowest paid workers in New Zealand but do incredibly important work."

Nearly half will see a boost of over $3 per hour, an extra $120 a week before tax for full-time workers. 20 percent of workers will see a boost over $5 per hour or about $200 before tax for a 40-hour week.

The extension to the settlement will cost $173.5 million over five years, and pay will be backdated to July 1 2017.

"This completes the settlement for care and support workers, it was strange that the mental health and addiction workforce was left out of the original settlement. That was a problem created by the previous Government which we have now put right," Dr Clark said.

The settlement comes after a claim was lodged by E tū union and the Public Service Association with the Employment Relations Authority, arguing mental health and addiction support workers should get the same wage boosts as aged care, disability care, and home support workers.

The Government agreed to negotiate with the unions to extend the Act.

Council of Trade Unions president Richard Wagstaff said the deal rightly puts mental health and addiction support workers back into the settlement they were wrongly left out of.

"Mental health and addiction support is vital and often emotionally intense work," he said.

"Unfortunately, people working in these roles have been undervalued in the same way as care and support workers. This deal not only makes it fair - it helps prevent a looming crisis in the broader sector, with people switching to aged care for better pay."

Mr Wagstaff said he's particularly pleased the pay offer has been backdated to when the first pay equity agreement came into force.

PSA assistant national secretary Kerry Davies said: "The Labour-led Government has made good on its commitment to work with unions and employers to deliver where the National Government failed. Our members stood together and now they're getting what they deserve."

Ms Davies said the settlement extension should help to recruit and train workers for the mental health and addiction support sector, which urgently needs more staff.

The initial $2 billion settlement was the result of a pay equity claim brought by E tū on behalf of care worker Kristine Bartlett. It argued that a care worker was paid less than a man with the same skill set in a different occupation, because care workers are predominantly female.